Iowa Code 490.147 – Ratification of defective corporate actions
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1. To ratify a defective corporate action under this section, other than the ratification of an election of the initial board of directors under subsection 2, the board of directors shall take action ratifying the action in accordance with section 490.148, stating all of the following:
a. The defective corporate action to be ratified and, if the defective corporate action involved the issuance of putative shares, the number and type of putative shares purportedly issued.
b. The date of the defective corporate action.
c. The nature of the failure of authorization with respect to the defective corporate action to be ratified.
d. That the board of directors approves the ratification of the defective corporate action.
Terms Used In Iowa Code 490.147
- Articles of incorporation: means the articles of incorporation described in section 490. See Iowa Code 490.140
- Corporate action: means any action taken by or on behalf of the corporation, including any action taken by the incorporator, the board of directors, a committee of the board of directors, an officer or agent of the corporation, or the shareholders. See Iowa Code 490.145
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Date of the defective corporate action: means the date or, if the defective corporate action occurred or may have occurred on more than one date, the range of dates, or the approximate date or range of dates, if the exact date or range of dates is unknown or not readily ascertainable, the defective corporate action was purported to have been taken. See Iowa Code 490.145
- Defective corporate action: means all of the following:a. See Iowa Code 490.145
- Failure of authorization: means the failure to authorize, approve, or otherwise effect a corporate action in compliance with the provisions of this chapter, the articles of incorporation or bylaws, a corporate resolution, or any plan or agreement to which the corporation is a party, if and to the extent such failure would render such corporate action void or voidable. See Iowa Code 490.145
- following: when used by way of reference to a chapter or other part of a statute mean the next preceding or next following chapter or other part. See Iowa Code 4.1
- Person: means a person as defined in section 4. See Iowa Code 490.140
- Plan: means a plan of domestication, conversion, merger, or share exchange. See Iowa Code 490.120
- Putative shares: means the shares of any class or series, including shares issued upon exercise of rights, options, warrants or other securities convertible into shares of the corporation, or interests with respect to such shares, that were created or issued as a result of a defective corporate action, and any of the following applies:
a. See Iowa Code 490.145- Shareholder: means a record shareholder. See Iowa Code 490.140
- Shares: means the units into which the proprietary interests in a domestic or foreign corporation are divided. See Iowa Code 490.140
2. In the event that a defective corporate action to be ratified relates to the election of the initial board of directors of the corporation under section 490.205, subsection 1, paragraph “b”, a majority of the persons who, at the time of the ratification, are exercising the powers of directors may take an action stating all of the following:a. The name of the person or persons who first took action in the name of the corporation as the initial board of directors of the corporation.b. The earlier of the date on which such persons first took such action or were purported to have been elected as the initial board of directors.c. That the ratification of the election of such person or persons as the initial board of directors is approved.3. If any provision of this chapter, the articles of incorporation or bylaws, any corporate resolution, or any plan or agreement to which the corporation is a party in effect at the time action under subsection 1 is taken requires shareholder approval or would have required shareholder approval at the date of the occurrence of the defective corporate action, the ratification of the defective corporate action approved in the action taken by the directors under subsection 1 shall be submitted to the shareholders for approval in accordance with section 490.148.4. Unless otherwise provided in the action taken by the board of directors under subsection 1, after the action by the board of directors has been taken and, if required, approved by the shareholders, the board of directors may abandon the ratification at any time before the validation effective time without further action of the shareholders.